HomeFeatured NewsTunisia: Growth remains weak, says FIKD

Tunisia: Growth remains weak, says FIKD

In its economic outlook for the first half of 2023, released on August 25, 2023, the Ibn Khaldun Forum for Development (FIKD) warned of a slowdown in growth, with GDP volume growth of 0.6% in the second quarter of the current year compared to the same quarter of 2022. Overall, GDP is expected to grow by 1.2% in the first quarter of 2023.

This trend in GDP can be explained by the consolidation of the growth rate in the tourism sector (17.5%) and transport (4.8%), by the resilience of the mechanical engineering sector (5%), in contrast to the agriculture and fishing sector, which recorded high negative growth (-12.5%), and the oil refining sector (-61.5%).

According to the FIDK, the IMF’s March 2023 reference scenario for Tunisia foresees a sharp decline in economic growth to 1.3% in 2023. This rate is unlikely to be achieved, given that growth contracted by an average of -1.3% in the second quarter and by 0.6% year-on-year.

Unemployment remains high

At the beginning of the second quarter of this year, the labor force increased by 13.5 thousand to 4,096,000 compared with 4,085.5 thousand in the second quarter of 2022.

According to FIKD, this population is “unevenly distributed” between the two sexes, with 71.8% of the working population being employed by men and 28.2% by women.

Moreover, the unemployment rate was 15.6% in the second quarter and remains higher for women (21.1%) than for men (13.2%).

Unemployment among tertiary graduates was particularly high, at 23.7% in the second quarter, compared with 23.1% in the first quarter.

Easing balance of payments

The FIKD noted that the current account deficit continued to narrow gradually to -2.2% of GDP at the end of May 2023. Despite the decline in the current account deficit, the overall balance of payments recorded a deficit in the first five months, putting pressure on foreign exchange reserves, which stood at TND 27,940 million at the end of June, compared to TND 24,179 million at the end of June 2022.

According to the Forum, this trend is explained by the difficulties in mobilizing financial resources in the form of external loans, highlighting the urgent need to conclude the financing agreement with the IMF and thus mobilize significant resources through bilateral and multilateral cooperation.

With regard to the State budget, the latest available statistics on its execution for the first three months of 2023 show a favorable trend in State revenues (+14.7%) and an increase in expenditures of 3%, resulting in a budget surplus of about TND 1,495.6 million in the first three months of 2023, compared with TND 276.4 million in 2022.

Inflation also remains high

In June 2023, the inflation rate stood at 9.3%, compared with 8.1% in 2022, despite the slowdown in the rate of price increases between May and June 2023 compared with the same period in 2022.

It should be noted that the level of inflation is on a par with that of food, where prices have risen by 15.2% over a year. Sheep meat prices have increased by 36.3%, poultry by 28.4%, eggs by 27.5% and beef by 21.3%.

According to the report, the gradual easing of inflation will continue for the rest of the year, but upside risks remain high.


Please enter your comment!
Please enter your name here

- Advertisement -